Smart cities: Designed for growth

June 25, will be remembered as a red-letter day in the history of urban India as three mission programmes with a huge spend were launched, all backed by India´s dynamic Prime Minister Narendra Modi: Smart Cities, AMRUT and Housing for All. The depth of these programmes can be gauged from the detailing in the guidelines and the extent of the detailed planning of the conduct of their launch.

After the PM set the tone by defining a smart city as one ´where the administration thinks two steps ahead of the needs of its citizens´, he urged the assembled urban development state ministers, mayors and municipal commissioners from across India to aspire to leave behind a legacy by which their contribution to building India´s model urban programmes would be recognised. Union Minister for Urban Development Venkaiah Naidu conducted the workshop for two full days where good work done by municipalities was presented and lauded and guidelines to the three missions were explained.

In four months, states will receive proposals from their cities that want to qualify as projects.

The states will then choose from among the selected cities from the list, and propose them as their entry to the Smart Cities Mission. It is likely that by March 2016 - under the mission - 20 cities will qualify for funding. These cities will receive Rs 200 crore in the first year and Rs 100 crore during the next four years. The cities will have to observe certain criteria, which include proposals for retrofitting with 500 acre or redevelopment with 50 acre or greenfield with 250 acre plus a pan-city smart solution initiative that has received the support of citizen groups. Further, they need to ensure that 10 per cent of power is sourced from renewables in case of greenfield development or redevelopment; 80 per cent of the buildings have to be energy-efficient; and 15 per cent of total housing provided needs to fall under affordable housing. The Urban Local Bodies (ULBs) have to provide financial statements for the past two years and demonstrate improvements as per the Swachh Bharat Mission and revenue generations from citizens through provision of services. All this is bound to gear ULBs up for accountability and good governance. As all procurements will take place through e-procurement measures, corruption will be minimised.

The Smart Cities Mission along with AMRUT, Housing for All, Digital India, Swachh Bharat and HRIDAY will see a total spend of Rs 4 lakh crore over the next five years. All these missions are integrated and interrelated. The essential change in these schemes over the past has been that the Centre has passed down the responsibilities of city improvement to the state. Introducing a challenge has added an element of competition. Once the ´smarter´ states win funding for their cities, private sector money aka builders will flow in, leaving some in the lurch. Once money starts taking sides, city leaders will compete. This opens up opportunities for PPP as nearly 50 per cent of the money for the cities will have to be generated by attracting the interest of private developers. The Housing for All scheme will accelerate ´in-situ´ slum redevelopment projects as it offers an incentive of Rs 1 lakh per 30 sq m flat built to developers. Housing loans of up to Rs 6 lakh for a 15-year period at an interest rate of only 6.5 per cent is being issued to the economically weaker segments of society to acquire a home.

The affordable housing segment is likely to continue to be the only beacon of light for the debt-ridden realty sector. On a similar note, the roads sector has been green lit and the PM is likely to trigger a wave in July. Government expenditure is slated to rise with a major bump in September to come from the additional amount of Rs 70,000 crore set aside for infrastructure. Last month, this column had wished away the dark clouds of despair (´Bure din gaye´). By September, we are likely to see the first crack of dawn of ´Acche din´!